Web3 Hong Kong Carnival Summit: CZ States CeFi Can Be Transparent on Blockchain

According to reports, at today’s Web3 Hong Kong Carnival Summit, Binance founder CZ stated that CeFi’s exchange can also be very transparent, with good reserve proof and verification on the blockchain. Binance has done such things, FTX wants to do such things but has not publicly disclosed them. If CeFi can be transparent, it is actually more transparent than traditional finance.

CZ: CeFi would be more transparent than traditional finance if it could be transparent

Introduction

The Web3 Hong Kong Carnival Summit, a prominent event in the blockchain industry, was recently held in Hong Kong. The summit has been known to showcase the latest developments in blockchain technology and discuss their impact on various industries. Of the many keynotes at the summit, one of the most talked-about ones was given by the founder of Binance, CZ. He discussed a topic that is critical to the crypto industry – transparency on CeFi exchanges through the blockchain.

The Importance of Transparency

Transparency is a crucial factor in the blockchain industry, especially with centralized finance (CeFi) exchanges. These platforms operate with immense power, and there is always a risk of fraudulent activities if there is not enough transparency in their operations. This risk is heightened in CeFi exchanges because they do not operate on a decentralized structure where everything is transparent on the blockchain. Therefore, efforts must be made to ensure transparency by showing good reserve proof and verification.

Binance’s Approach

CZ stated that Binance has been working towards showing reserve proof and verification on the blockchain to ensure transparency. These efforts enable Binance to be more open and honest about its operations than other CeFi exchanges. CZ highlighted that this approach is beneficial to both the exchange and its customers as it builds confidence and trust in the platform. Binance is one of the world’s largest crypto exchanges that continue to set the benchmark for the industry.

FTX’s Approach

FTX is another notable CeFi exchange in the blockchain industry with its focus on transparency. However, FTX has not publicly disclosed its reserve proof and blockchain verification efforts, unlike Binance. CZ mentioned that FTX aims to follow Binance’s example and implement similar measures that demonstrate transparency to its customers. These measures can help build trust and contribute to the mass adoption of blockchain and cryptocurrency.

CeFi vs. Traditional Finance

CZ also stated that CeFi has the potential to be much more transparent than traditional finance. Traditional finance operates through banks that have their regulations and internal systems. Thus, their operations outside of public institutions are not always transparent, which makes it difficult for customers to trust them entirely. On the other hand, transparency is inherent in CeFi exchanges, given the transparency offered by the blockchain. Companies need to take the initiative to ensure appropriate transparency measures are in place, such as implementing reserve proof and blockchain verification.

Conclusion

Transparency is a critical factor for the blockchain industry and CeFi exchanges. Binance and FTX, two of the world’s most prominent crypto exchanges, are working towards demonstrating their transparency. By implementing measures such as reserve proof and verification on the blockchain, companies can build a level of trust with their customers. CeFi exchanges can be more transparent than traditional finance, making these measures all the more important.

FAQs

Q1. What is CeFi?

CeFi stands for “Centralized Finance,” which is a financial system in which an intermediary – typically an exchange, bank, or broker – provides financial services to customers.

Q2. How does transparency help CeFi exchanges?

Transparency helps build trust and confidence in CeFi exchanges. When exchanges implement measures such as reserve proof and verification on the blockchain, customers can see the exchange’s operations, which increases trust and transparency.

Q3. How is CeFi more transparent than traditional finance?

CeFi exchanges operate on a blockchain, which inherently offers transparency. Unlike traditional finance, where operations outside of public institutions are not transparent, CeFi exchanges can set up appropriate transparency measures to ensure honest operations.